US ECONOMY & POLITICS

U.S. Companies Add Most Jobs in Three Months, ADP Data Show – Bloomberg, 10/6/2021

• U.S. companies added more jobs than forecast in September, the most since June, suggesting that ongoing hiring challenges are beginning to ease as more Americans return to the workforce.
• Businesses’ payrolls increased by 568,000 last month, led by leisure and hospitality, after a revised 340,000 gain in August, according to ADP Research Institute data released Wednesday. The median forecast in a Bloomberg survey of economists called for a 430,000 rise.
• Service-provider employment increased 466,000 in September, led by payrolls at leisure and hospitality businesses, which rose by 266,000 during the month.
• Payrolls at goods producers climbed by 102,000, mostly driven by gains at construction and manufacturing firms, both the most in a year.
• Companies with more than 1,000 workers added 354,000 people to payrolls, while small businesses posted a gain of 63,000.

Democrats Float Changes to Filibuster Amid Debt Ceiling Standoff – Wall Street Journal, 10/6/2021

• Top Senate Democrats and Republicans blamed each other for the failure of Congress to raise the nation’s debt ceiling, with some Democrats floating possible changes to the Senate’s filibuster rule to resolve the impasse, ahead of a possible default in as little as two weeks.
• Senate Minority Leader Mitch McConnell (R., Ky.) repeated that Democrats shouldn’t expect any GOP help, arguing they should use a procedure called budget reconciliation to pass the debt-limit increase with just a simple majority.
• Sen. Chris Murphy (D., Conn.) and other Democrats said they were discussing a possible one-day elimination of the 60-vote filibuster in order to raise the debt ceiling, or potentially a permanent carve-out that would make it against the Senate rules to filibuster debt ceiling increases.
• Such a change would require the support of all 50 Democrats, and Sens. Joe Manchin (D., W.Va.) and Kyrsten Sinema (D., Ariz.) have been adamant that they want to preserve the filibuster.
• Republicans view creating exceptions to the filibuster as the start of a process that would end with the rule’s elimination as lawmakers lobby for additional legislation—such as on immigration or voting—to also be exempt.
• Asked Tuesday whether he would be open to making some temporary changes to the filibuster to deal with the debt ceiling, Mr. Manchin responded, “I just know that there’s enough people here that will not let this country fall to default. So I want all of your readers at The Wall Street Journal to know: It is not going to happen.”

Democrats Wrangle Over How to Shrink $3.5 Trillion Proposal – Wall Street Journal, 10/6/2021

• Democrats wrestled Tuesday with how to squeeze their wish list of programs and tax changes into a social policy and climate package whose size and scope centrists in the party are willing to support.
• Mr. Biden said Tuesday he was hopeful Mr. Manchin would be willing to spend more than the $1.5 trillion he had earlier proposed. “Sure sounds like he’s movin’. I hope that’s the case,” Mr. Biden said.
• “I’m not ruling anything out, but the bottom line is I want to make sure that we’re strategic and we do the right job,” Mr. Manchin told CNN.
• A central question Democrats must now contend with is whether to try to squeeze in funding for a broader array of programs by shortening their duration, or spending on fewer programs for a longer period.
• Senate Majority Leader Chuck Schumer (D., N.Y.) said this week he hoped to pin down an agreement within coming days to pass the full package by the end of the month, though some lawmakers and aides say the process could take longer.

Student-Loan Forgiveness to Include More Public-Sector Workers – Wall Street Journal, 10/6/2021

• The Biden administration is expected to overhaul a student-loan forgiveness program that would make it easier for more public-sector workers to qualify for debt relief.
• The planned changes to the Public Service Loan Forgiveness program will help roughly 550,000 borrowers of the 1.3 million enrolled in the program get closer to loan forgiveness, the Education Department said.
• To qualify for loan forgiveness, a borrower must work in a public-sector job and have made 120 on-time payments toward repaying the debt. But the program is only available to borrowers who have a specific type of student loan, known as Direct Loans, from the federal government.
• The changes set to be announced Wednesday will temporarily allow all payments regardless of loan type to count toward the PSLF program, if borrowers consolidate their student debt by Oct. 31, 2022. Borrowers with formerly ineligible loans will also have their payments counted, if they apply for the program by that date, the Education Department said.

EUROPE & WORLD

German industrial orders fall more than expected in August – Reuters, 10/6/2021

• German industrial orders fell more than expected in August on weaker demand from abroad following two months of unusually strong gains due to major contracts, data showed on Wednesday.
• The figures published by the Federal Statistics Office showed orders for goods ‘Made in Germany’ were down by 7.7% on the month in seasonally adjusted terms. A Reuters poll of analysts had pointed to a drop of 2.1% on the month.
• The steep drop on the month was partly caused by previous orders for planes, ships and other large vehicles which had pushed up orders by 4.9% in July and 4.6% in June, the office said.
• Without this distorting effect, industrial orders were down by 5.1% in August.
• Nonetheless, overall industrial orders remained at a historically high level and were already 8.5% above their pre-crisis levels of February 2020, the month before Germany was hit by the COVID-19 pandemic, the ministry said.

U.K. Inflation Expectations at 13-Year High Lift Rate-Hike Bets – Bloomberg, 10/6/2021

• A market-based measure of expected inflation in the U.K. over the next decade topped 4%, bolstering wagers for tighter monetary policy.
• The so-called 10-year breakeven rate climbed as much as 10 basis points to 4.08%, the highest since 2008. The move was spurred by a spike in energy costs with U.K. natural gas prices surging to a record, threatening to fuel higher consumer prices.
• In response, money market have almost fully priced a rate hike from the Bank of England as soon as December, in what would be its first increase in over three years.
• The Times newspaper also reported Prime Minister Boris Johnson will announce a rise in the minimum wage to about 9.42 pounds ($12.78) per hour within weeks, further muddying the outlook.

New Zealand Raises Interest Rates as Inflation, Housing Pressures Build – Wall Street Journal, 10/6/2021

• The Reserve Bank of New Zealand lifted its benchmark rate to 0.5% from a record-low 0.25% and signaled more increases over the next year, as it seeks to tame inflation stoked by higher oil prices, rising transport costs and supply-chain disruptions. It said the increase would also drive up mortgage rates and so help cool house prices, up about 30% over the past year.
• New Zealand offers a preview of the challenges that countries may face as they emerge from the pandemic. Rising household debt and inflation have become a bigger threat to some economies than any resurgence of Covid-19 driven by the Delta variant.
• South Korea and Norway have already tightened monetary policy, while interest rates in more-volatile emerging economies from Brazil to Turkey have also gone up.

China Leaps Ahead in Effort to Rein In Algorithms – Wall Street Journal, 10/6/2021

• A sweeping new plan to restrain the algorithms that power tech platforms has thrust China to the forefront of a growing movement to curb the influence of giant internet companies.
• Launched last week by the Cyberspace Administration of China, the campaign aims to establish a comprehensive system to regulate the use of algorithms within three years, part of the ruling Communist Party’s effort to rein in what it sees as unscrupulous business practices and exert more control over online discourse.
• The campaign puts China a step ahead in policing tech platforms, as governments around the world grapple with how to respond to automated technologies that are rewiring business, social interactions and politics.
• Under the three-year plan released last week, Chinese regulators outlined steps to monitor algorithms, including a registration process and the establishment of a technical team to evaluate an algorithm’s mechanisms and risks.

TeamViewer Warning a Wake-Up Call for Europe’s Lockdown Darlings – Bloomberg, 10/6/2021

• European pandemic winners from online fashion retailers to companies supporting remote-working are suffering lockdown withdrawal symptoms.
• TeamViewer’s outlook cut on Wednesday was followed by a whopping 28% plunge that dragged the German software maker’s shares to a record low.
• It’s among growing signs that the good times for companies that benefited from people stuck at home during the pandemic are ending.
• With Europe’s third-quarter earnings season just around the corner, investors will keep a close eye on online food delivery firm Just Eat Takeaway.com’s trading update and retailer Asos’s full-year results, both due next week.
• Analysts are also sounding the alarm. Logitech International fell as much as 8.3% last week after Morgan Stanley downgraded the Swiss maker of headsets, wireless mice and webcams to underweight, citing expectations for demand to fade and earnings estimates to decline.

Tesco defies supply chain challenges to lift profit outlook – Reuters, 10/6/2021

• Tesco, Britain’s biggest retailer, raised its full-year earnings forecast on Wednesday after the unmatched scale of its store and online operations helped it outperform rivals in the first half and beat expectations with a 16.6% jump in profit.
• Group sales rose 3% to 27.3 billion pounds, while UK like-for-like sales climbed 1.2%, having risen 0.5% in the first quarter.
• The company, with a 27% share of Britain’s grocery market, made an adjusted retail operating profit of 1.39 billion pounds in the first half versus 1.19 billion a year earlier.
• Despite inflationary pressures, Tesco said its customers saw prices fall in the first half and they were still falling in the second half.
• Tesco forecast a full-year adjusted retail operating profit of 2.5-2.6 6 billion pounds, having previously forecast a similar outcome to 2019-20, when it made 2.3 billion pounds.

Factmonster – TODAY in HISTORY

• Japanese-American broadcaster, Iva Toguri D’Aquino (Tokyo Rose), was sentenced to 10 years in prison and fined $10,000 for treason. (1949)
• The Yom Kippur War began when Syria and Egypt attacked Israel. (1973)
• President Jimmy Carter received Pope John Paul II, the first pope to visit the White House. (1979)
• Egypt’s President Anwar Sadat was assassinated in Cairo. (1981)